Our Office's Efforts in Real Estate and Infrastructure Projects in Asia

Nakagawa

Today, I would like to talk about the support system and recent initiatives of this office in real estate and infrastructure projects in Asia. First, what are the characteristics of real estate and infrastructure projects in Asia?

Horaguchi

Real estate deals, not just in Asia, are generally characterized by the need to conclude deals that require application of multiple laws. With regard to real estate, which is the core of the project, legal systems related to land, building standards, and other related laws and regulations have become issues, and in recent years, environmental laws and regulations have become issues that need to be addressed too in many cases.

Yan Mo

As land ownership and registration systems of each jurisdiction are often influenced by traditional or indigenous land ownership systems, real estate related regulations vary greatly by jurisdiction. In dealing with real estate projects, it is important to ensure that there are no problems in holding interests or acquiring the target properties and check whether there may be issues that should be considered in proceeding with any project. It is important that land surveys are conducted with an understanding of the land ownership and registration systems of each country.

Maekawa

Real estate use and development by corporation are economically important and moreover, such activities may have many impacts on national security and sovereign. Therefore, it can also be said to be a characteristic that foreign investment regulations are often material, mainly in Southeast Asian countries. When conducting a real estate development in those countries, regulations may be applied differently depending on the owner of the land and type of real estate development. Therefore, it is necessary to proceed after taking into consideration the advice of counsels with specialized knowledge.

Nakagawa

In order to comply with foreign investment regulations, joint ventures are often formed with local real estate developers as partners.

Maekawa

Yes. As a result, contract negotiations with joint venture partners are also a very important. Since the required investment amounts are necessarily substantial, financing is usually procured from local financial institutions, and contract negotiations with these financial institutions would be important as well.

Patricia

It is also notable that competition law issues often arise because of the substantial amount of investment involved, and often times the joint venture partner is an entity already holding a certain market position in the region. In many cases in the Philippines, the necessity of notification to competition authorities needs to examine, and in some cases, notification regarding the joint venture is actually required.

Minowa

There are many issues that arise in infrastructure projects that are common with real estate development projects. In recent years, however, there have been an increase in renewable energy projects in Asia, and there are some jurisdictions where the government has granted tax and other benefits or relaxed foreign investment restrictions in order to promote a shift to clean energy. In some cases, investment opportunities are expanding due to changes in the legal system. Therefore, I think that we should pay close attention to government trends and the changes in the legal system that accompany them.

Nakagawa

I now have a good understanding of the characteristics of real estate and infrastructure projects in Asia. Next, can you discuss about recent trends?

Hoai

For example, in Vietnam, changes in the legal system and business practices are continuing. The ease of obtaining development-related licenses also varies from period to period, so I think it is important to proceed and schedule the application of such licenses with inputs from local experts who are knowledgeable on the local trends.

Horaguchi

The diversification of projects is also a recent trend.
In around 2010, when Japanese real estate companies accelerated the expansion of their operations in Asia, they tended to prefer projects that quickly produced short term results by completing sales within a certain period of time after the construction of condominiums, etc. In recent years, however, there has been an increase in developing properties with the intention of holding them long term, in the expectation of continuing investments in each country. As for properties held in the long term, in addition to the development of office buildings as in the past, the number of projects involving the development of logistics facilities is increasing in line with the growth in e-commerce, as is the case in Japan. In addition, travel and mobility have been recovered since the Corona pandemic, and the impression is that the development of hotels and service apartments that meet the needs of both business and private use is increasing.

Yan Mo

As in Japan, the population is aging in China and some parts of Southeast Asia, and many countries are facing social issues in terms of how to respond to an aging society. Therefore, going forward, there may be an increase in projects for the development of hospitality facilities, such as healthcare-related nursing facilities.

Minowa

Thailand’s population is also aging, and Thailand's Investment Committee has also encouraged the development of nursing care facilities, so I think there is a possibility that such projects will increase in the future. In the healthcare sector, the concept of Smart City, which mobilizes advanced technologies such as Healthcare Mobility Tech, is also progressing, and we are also helping clients navigate through the legal challenges of such projects.

Hoai

In the infrastructure projects, the shift to renewable energy is progressing rapidly, and the number of solar power generation projects and other similar projects is increasing.

Patricia

In the Philippines too, foreign investment regulations in renewable energy projects were relaxed last year. Because of this, it is expected that foreign companies will become more active in establishing operations in the Philippines.

Minowa

Since I am part of the Bangkok office, I have been involved in many development projects in Thailand, but I have also been in charge of many development projects in the Philippines, and I often work with my colleagues in the Singapore office on those projects.

Patricia

In conducting projects in the Philippines, it is essential to collaborate with local law firms, such as when conducting surveys on land. Through collaboration with local law firms in many projects, the office has established good relations with local law firms, and has developed a system to smoothly support projects together with local lawyers who take into account the needs of Japanese companies.

Horaguchi

Lawyers of Tokyo office who have a lot of experience in real estate projects are often involved in these projects in collaboration with lawyers from various offices in Asia. In addition, there are many projects in which the Tokyo Office is actively leading development projects for jurisdictions where such as in Australia, India, and other countries where we do not currently have local offices open.

Yan Mo

The China Practice Group is composed of lawyers located in our Shanghai and Tokyo offices, including many Chinese lawyers and advisors as well as Japanese lawyers with experiences in projects involving China. . We are fully capable of handling matters in Chinese, English, and Japanese languages. In order to enhance our collective knowledge and expertise in China-related legal practice and developments, we regularly hold internal study sessions across our offices.

Nakagawa

I was actively involved in real estate projects and infrastructure projects in different offices. I understood that knowledge sharing and synergies were created by cooperating across offices, while acquiring expertise and achievements as individual offices. I would like to work with you on more projects and support our clients.

Thank you very much for your time today, everyone.